When a good company is acquired by a lesser company-what is the focus of OD?

This is a highly specialized article about doing a post merger OD intervention in a situation whereby a less successful  company with fewer competencies acquires a more successful and competent company and/or when a large, rigid behemoth acquires an innovative company, as illustrated by consultant Terry Seamon in his comments to this post.

First of all, let’s talk about what not to do:

  • don’t focus on creating one culture or merging the two, which cannot be done in any case.
  • don’t initially focus on the interfaces.
  • don’t work on cultural differences.

The initial focus should be on:

  • structure that accommodates as much autonomy as possible for the short term as well as minimizing interfaces where the gaps in competency are overwhelming.
  • short-term decision making forums based on parity, i.e. an equal number of decision makers from both sides, if at all possible. It’s not perfect but it’s probably the best that can be done.
  • preservation of competencies in the acquired company. 
  • reputation management with the client base with special attention to account managers
  • as much relocation as possible for as long as possible; this can be used to mitigate impact of less successful layers and augment the impact of more competent if done properly
  • creation of a House of Lords in order to relocate members of the acquiring company who need to be moved aside elegantly

For a cookbook on how to choke an innovative company to death, here is a link.





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2 thoughts on “When a good company is acquired by a lesser company-what is the focus of OD?

  1. This post reminded me of my experiences being in an acquired company. In one case, I was part of a good little company (Teleport) that was acquired by a giant (AT&T aka “T”). The purchase was strategic for T as it brought them into the local business market.

    For Teleport, there was no hope of remaining intact. Your recommendations are great, Allon, especially autonomy and preservation of competencies. Unfortunately that was not the plan on T’s part.

    Teleport, which had been widely known for its fast-moving, innovative, and customer-driven culture, was quickly dismantled.

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